shares plunged after the chip manufacturer shared preliminary financial results for the second quarter.
) is expecting revenue to be $6.7 billion, well below guidance and estimates calling for $8.1 billion. The miss was primarily due to weaker-than-forecast gaming revenue, which will come in 33% lower year over year at $2.04 billion.
“Our gaming product sell-through projections declined significantly as the quarter progressed,” said Jensen Huang, founder and CEO of Nvidia. “As we expect the macroeconomic conditions affecting sell-through to continue, we took actions with our Gaming partners to adjust channel prices and inventory.”
Adjusted gross margins are expected to come in at 46.1%, down from the company’s previous guidance of 67.1%, Nvidia said. The company still believes its long-term gross margin profile is intact, as it has slowed operating expense growth, said CFO Colette Kress.
The silver lining will come from the company’s data center segment, which saw record revenue of $3.81 billion for the quarter, up 61% from the year before. That said, the company acknowledged it was short of expectations because of supply chain disruptions.
Nvidia will report final earnings results on Aug. 24. Shares were down 5.4% to $179.54. Competitor
Advanced Micro Devices
(AMD) ticked down to 0.7%.
Wall Street analysts had already slashed their projections heading into earnings, as demand for graphics cards and personal computers weakened. Barron’s had also cautioned investors about the company’s fundamentals in April, citing unsustainable prices and exposure to cryptocurrency mining.
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